How This 26-Year-Old Founder Plans To Take Chai Mainstream With Her Artisan Brew

Amy Rothstein, 26, started her chai business with one 70-gallon kettle. But even though she’s quickly expanding her business in the U.S. and abroad, she has no plans to upsize. “We’re not going to have a 500-gallon kettle,” she says. “Our product and quality will never change.”

That conviction is at the heart of her vision for Dona Chai, the artisan chai company she founded in 2014. It’s how she plans to set her business apart from dominant competitors in the space and win over coffee converts.

Several large chai producers, like Oregon Chai (which did $25 million in revenue before it was bought in 2002 by Irish food conglomerate Kerry Group) and Bhakti Chai (which has raised $4 million in funding), already crowd the market with their wholesale offerings, sold in cartons, jugs, and cups designed for Keurigs. Brewed in Brooklyn, NY, Rothstein’s Dona Chai is one of the few small batch, locally produced chai brands sold in the U.S. Her product comes in trendy, minimalist glass bottles and is available online and in independent coffee shops. She's working to create a home in the U.S. for the traditional Indian drink by making it more readily available to U.S. customers.

At the time a food studies graduate student at New York University, Rothstein’s entrepreneurial ‘aha’ moment came when she realized what was missing from cafe drink menus. “I was going to a lot of coffee shops and I noticed all the local coffee and pastries, but no one was offering high quality, local chai,” says Rothstein.

From there, Rothstein started experimenting with chai recipes, which combine spices and ingredients like black tea, ginger, cloves and cardamom. She leaned on $350,000 in seed funding from her father, Charles Rothstein, who runs Michigan-based venture capital firm Beringea, and then officially went into business with her brother, Peter Rothstein, 24, to bring Dona Chai to consumers.

Her first step was revisiting the cafes she already knew needed chai. “I went to local coffee shops and asked them to try my chai. Within the first two months of launching I had acquired 10 independent coffee shops,” says Rothstein. Interest from other independent cafes has taken her brand national and international. Her chai ships to small shops from Encinitas, CA, and Kansas City, MO, to Calgary and, most recently, to Harrods in London.

Besides stocking chai at 15 Whole Foods locations, most of her 300 accounts are one shop stores. Many, she says, hear about her product and reach out to her through email. “There was a ‘third wave’ coffee movement. We’re the third wave chai,” says Rothstein. She expects $600,000 in revenue for 2016 and anticipates to at least triple the size of her business in the next calendar year. Her company and other small and large chai makers have formidable opponents in the massive tea and coffee industries, bringing in $11 billion and $48 billion, respectively.

Courtesy of Dona Chai

Dona Chai launched with a chai concentrate, meant to be mixed with milked and served hot. The brewer has since added two ready-to-drink products, Dirty chai made with cold brew coffee and chai latte made with almond milk.

Beyond introducing new products and scaling, Rothstein is, more largely, working to bring awareness of chai as a player in the beverage scene beyond dominant peers coffee and tea. “We have to do more to make people aware of chai as a good food product. We have to convince people we matter and are growing to matter in the larger scene,” says Rothstein.

That’s part of the strategy to own her space by producing locally-produced chai while making a greater impact. “I’ve been thinking about how to start a bigger movement or trend to chai,” says Rothstein.

Dona Chai now faces a challenge all artisan companies confront when scaling for demand, increasing production while maintaining consistent quality. “The hurdle for food companies is how to maintain a product while keeping profit margins and costs in mind. It makes it difficult for food companies to produce and maintain the integrity of the product,” says Rothstein. “Our challenge is how do we make our margins by changing anything but the quality of our product.” Her growing team of four has the same mission in mind, but for now she’s sticking with her original kettle.

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I'm associate editor for Forbes' 30 Under 30 list and vertical. I also write about food, startups and entrepreneurs. I studied English Literature and History at Colgate University and spent some time at CNBC and the Syracuse Post-Standard. Email me at nsportelli@forbes.com.